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Ford Gives U.K. Land Rover Plant
A Week to Forge New Overhaul Plan

By

Stephen Power Staff Reporter of THE WALL STREET JOURNAL

Updated Sept. 1, 2004 12:01 a.m. ET

FRANKFURT -- The head of
Ford Motor Co.'s
European operations gave managers and workers at Ford's Land Rover factory in the British Midlands seven days to develop a new plan to boost quality and profit, and warned that the plant's future and thousands of jobs could be in jeopardy.

The warning by Mark Fields, executive vice president in charge of Ford of Europe and Premier Automotive Group, is the latest in a series of signs that Ford senior management in Dearborn, Mich., is stepping up pressure on the auto maker's two underperforming British luxury brands, Land Rover and Jaguar.

Ford doesn't give details on profits for each of its European luxury brands, but the auto maker's Premier Automotive Group surprised investors with a $362 million (&euro;300.5 million) loss in the second quarter, despite strong profit at the Swedish Volvo brand, which is also part of the group.

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In May, Mr. Fields told managers and union leaders at Land Rover's Solihull, England, plant to draw up a detailed "road map" for restoring the brand's quality after Land Rover finished below average in a widely watched quality survey by the research firm J.D. Power & Associates. But after a meeting yesterday with Solihull managers and union leaders, Mr. Fields said he wasn't satisfied with the plan the two sides had crafted over several weeks. "The team made some good progress...but not good enough to become competitive with its sister Jaguar plants and best in class in five years," Mr. Fields said. "So from my standpoint, there can't be any half-measures."

Mr. Fields said he was hopeful that local managers and union leaders would produce a plan that meets his criteria, which he declined to outline but said "runs the gamut" from reducing labor hours per vehicle to cutting warranty costs. He also made clear that the future of the Land Rover plant, which employs 8,000 people in the Solihull borough, is very much at stake.

A spokesman for the Transport and General Workers Union, which represents Land Rover workers, said the meeting with Mr. Fields was "positive," and that "we're still confident the objectives set out by Ford of Europe can be met over the next week.

Mr. Fields's rejection of the plan is the latest dramatic turn within Ford's Premier Automotive Group, which also includes Jaguar, Aston Martin and Volvo. It comes four days after Ford announced it is cutting production at its three Jaguar plants in the United Kingdom for the remainder of the year by nearly 12% after disappointing sales in the U.S. market.